Friday, November 18, 2016


It looks like the Form 1098-T – now required to claim an education tax benefit – will remain as useful as tits on a bull for another year!
The week-day daily "Checkpoint Newsstand November 18, 2016" brought this bad news on my 63-rd birthday (highlights are mine) -
No penalty for 2017 Forms 1098-T. IRS will extend the relief from penalties under Code Sec. 6721 and Code Sec. 6722, as described in Ann. 2016-17, to 2017 Forms 1098-T. Eligible educational institutions, therefore, will continue to have the option of reporting either the amount of payments of qualified tuition and related expenses received in Box 1 of Form 1098-T or the amount of qualified tuition and related expenses billed in Box 2 of Form 1098-T for the 2017 calendar year without being subject to penalties.
This relief is limited to 2017 Forms 1098-T required to be filed by eligible educational institutions by Feb. 28, 2018 (or Apr. 2, 2018, if filed electronically) and furnished to recipients by Jan. 31, 2018.”
The IRS had previously rendered most 2016 Form 1098-Ts totally worthless –
Earlier relief. Following the enactment of the PATH Act, numerous eligible educational institutions informed IRS that implementation of the law change will require computer software reprogramming and other changes that cannot be implemented in time to meet the applicable filing and furnishing due dates for Form 1098-T for calendar year 2016. Accordingly, in Ann. 2016-17, IRS provided that these penalties would not be imposed on eligible educational institutions with respect to Forms 1098-T required to be filed and furnished to individuals for the 2016 calendar year if the institution reports the aggregate amount billed for qualified tuition and related expenses on Form 1098-T instead of the aggregate amount of payments received. 
And now the bulk of 2017 Form 1098-Ts will also be totally worthless -
Continued difficulty. Representatives of eligible educational institutions have informed IRS that, despite diligent efforts, the changes to accounting systems, software, and business practices that eligible educational institutions must make to implement this law change cannot be accomplished in time to apply these changes for calendar year 2017.”
Hopefully more than the usual handful of 2016 and 2017 Form 1098-Ts will actually provide useful information - but there is no incentive to make this happen.
Bad move by the IRS. 
They want tax pros to become Social Workers and do their work for them, and at the same time make it more difficult for us to do our work.  They have added multiple hours to the preparation of returns for lower-income clients who can least afford the appropriate additional fees we should be charging for this extra work.
The tax preparation community needs a unified lobbying voice in Washington!

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